The GEF will finance the incremental costs of construction and operation, by the private sector, of a grid-connected, 140MW solar-thermal fossil-fuel hybrid power plant in Rajasthan, incorporating a parabolic trough solar thermal field of about 35-40MW. The plant would demonstrate the operational viability of solar trough technology and its use by an independent power producer with commercial sales and delivery arrangements with the grid. The project is designed to stimulate the expansion of solar-thermal technology worldwide over the long term.

Implementation Status

There are serious technical and financial risks that the Bank recognizes which are under discussion with KfW. The next step are receipt of a joint letter from GOI and GoR: (i) outlining the common assumptions, and their implications, of the economic and technical appraisal of the project by the Bank and KfW, and (ii) requesting agreement from the government on their support for the project, including financial and regulatory commitments. In particular, this would include a gas supply agreement being in place, a power purchase agreement been effected, and an assurance that GoR will reimburse the distribution companies for the difference between cost of power from Mathania and the baseline plant's cost.